Political Upside to Stalled Student Loan Bill

Seeing a political opportunity, Senate Democrats will continue to criticize Senate Republicans on the floor this week for voting against their student loan bill before moving to the next item of business, which could be the Democrats’ small-business tax cut package.

“We are going to be conducting efforts to ... show the American people how important this is and why the Republicans should let us move forward with this legislation,” Majority Leader Harry Reid (Nev.) said.

Democrats plan to take to the floor to highlight the stories of students who will be affected should Congress fail to act by July 1, when current law expires and the 3.4 percent interest rate on Stafford loans will double.

Rather than trying to move on to another piece of legislation, Democrats will allow the student loan bill to remain the pending business before the chamber.

“We are going to be coming to the floor and sharing stories about students that we’ve met and the hardship that this Republican position has created,” Majority Whip Dick Durbin (Ill.) said Tuesday.

His comments come after Senate Republicans, who say they also want to avert the interest rate increase, blocked the Senate from moving forward on the Democratic bill.

Republicans oppose the offset, which they argue would hurt job creation and the economy.

In a 52-45 vote along party lines, the student loan measure fell short of the 60 votes needed to overcome a filibuster. Sen. Olympia Snowe (R-Maine) voted present, and Reid voted against the bill in order to preserve his right under the rules to bring it up again.

The bill would have covered the $6 billion cost of preventing the interest rate increase by eliminating a corporate tax loophole that allows wealthy individuals to pay less in Social Security and Medicare taxes.

After the vote, Reid recommended that presumptive GOP presidential nominee Mitt Romney call Minority Leader Mitch McConnell (Ky.) to win him over. Democrats have said Romney used a similar offset as governor of Massachusetts, and Romney has said he wants to make sure interest rates remain low.

“I suggest he pick up the phone and call Sen. McConnell and tell him he favors what we are trying to do,” Reid said.

Republicans said they blocked the Democrats’ bill because they wanted to jump-start negotiations on a bipartisan pay-for that can pass both chambers.

McConnell said Reid should call Speaker John Boehner (R-Ohio) to get the talks going.